HEADLINE

Cement consumption in May08 up by 22.6% YoY
It is reported that cement consumption as of May08 rose by 22.6% YoY to 3.6m tons from about 2.9m tons as of May07. Accordingly, the 5M08 consumption went up about 20% YoY to 15.4m tons vs. 5M07's 12.8m tons. In addition, cement producers may increase its retail price by 10%-15% this month. Source: Investor Daily
The May08 cement consumption was higher than our expectation hence we believe the cement industry outlook remains positive despite the news reporting delays of infrastructure and subsidized fuel price hike.
Increase in sales volume and selling price will benefit cement producers, our top pick in the cement sector is INTP.

ANTM: Bidding offers to Herald unconditional
State-owned ANTM and Shenzhen Zhongjin Lingnan Nonfermet Co Ltd via its special purpose vehicle Tango Mining Pte Ltd (Tango) said they provided unconditional terms for securing stakes in Australia-based Herald Resources Ltd (Herald). Herald's director would recommend its shareholder to accept Tango's offer if there was no superior proposal offered, said Herald in a statement. The company agreed to pay Herald shareholders cash offer of AU$2.8 per share within 12 days of acceptance or 12 days from the date of announcement. The offer is slated to close on July 1 at 5 p.m. Perth time. The decision by ANTM-led consortium was taken to help
win the six-month battle against BUMI, Indonesia's largest coal producer, in controlling Dairi lead and zinc mine in North Sumatra, which is owned by Herald. Source: The Jakarta Post

TLKM: To pay special dividend of Rp1.93tr
TLKM will pay special dividend of Rp1.93tr or about 15.0% of FY07 net profit or Rp97.73 per share. The shareholder meeting has agreed to allocate about 70% of FY07 net profit for cash dividend, including an interim dividend of Rp965.4bn (Rp48.4/share) and the above-mentioned special dividends. Final dividends, excluding special dividends, amounted about Rp6.1tr or Rp309.4/share. TLKM will pay its final dividend on July 31st, 2008 while the special dividend will be paid on October 28th. Source: Bisnis Indonesia.

WIKA: Expanding the LPG capacity
WIKA plans to invest some Rp40bn-Rp50bn to increase its LPG production capacity to 8.0m units up to end of this year. In 2009, the company will further add its capacity to reach 13.0m units. The company's management believed the prospect of LPG remains positive as the government plans to distribute subsidized LPG tank about 40m units in 2008 and 50m units in 2009. WIKA estimated FY08 sales of LPG tank to reach Rp430bn with net profit of Rp17bn. Source: Bisnis Indonesia
WIKA has years of experience in the LPG business. Note that since 2000 the company has become one of Pertamina's suppliers for the 12.0kg LPG tank. In addition, WIKA also has received international certification of ISO 9000 and ISO 14000 for producing LPG tank since 8 years ago. With net margin of 4.0%, the LPG offers higher profitability than the company's core business (construction) that only has net margin of 2.0%-3.0%. Our FY08 revenue estimate of Rp6.0tr has not included the LPG tank sales.